Qualcomm CEO Cristiano Amon responds to a matter during a keynote conversation at CES 2024, an annual consumer electronics trade show, in Las Vegas, Nevada, on Jan. 10, 2024.
Steve Marcus | Reuters
Qualcomm reported fiscal first-quarter results on Wednesday that topped analysts’ estimates as sales of handset chips jumped 16% from a 12 months earlier. Qualcomm shares fell over 2% in prolonged trading.
Here’s how the chipmaker did for the quarter ending Dec. 24, per consensus expectations from LSEG, formerly generally known as Refinitiv:
- Earnings per share: $2.75 adjusted vs. $2.37 expected
- Revenue: $9.92 billion adjusted vs. $9.51 billion expected
For the present quarter, Qualcomm said it expects adjusted earnings of between $1.73 and $1.93 per share on revenue of $8.9 billion to $9.7 billion. Consensus expectations, in accordance with LSEG, were for earnings of $2.25 per share on $9.3 billion of revenue.
Net income rose 24% in the course of the quarter to $2.77 billion, or $2.48 per share, from $2.24 billion, or $1.98 per share, a 12 months ago.
Qualcomm is best-known for making smartphone chips — each the modems that connect them to cellular networks, in addition to the processors at the center of high-end Android devices.
Under CEO Cristiano Amon, Qualcomm has been working to use its chip technology to markets beyond smartphones, including PCs, cars and virtual reality headsets. Nevertheless it’s still a serious smartphone supplier as the worldwide market has slumped over the past two years.
Qualcomm said it shipped $6.69 billion in handset chips in the course of the December quarter, up 16% 12 months over 12 months, a positive sign for the smartphone market after two years of declines. Qualcomm said it expected that global handset sales can be flat year-over-year.
Notably, Samsung’s high-end Galaxy phones launched in January use Qualcomm processors, and the corporate expects that business to proceed for several years under a recent deal, foreclosing the chance that the second-largest smartphone maker would eschew Qualcomm for its own chips.
Qualcomm’s Web of Things business includes the chips Meta uses in its virtual reality headsets. That segment saw sales slide 32% to $1.13 billion.
Qualcomm is betting heavily on selling chips to automakers and automotive suppliers, but it surely’s a process that can take years as automotive parts have a protracted “qualification” cycle because of regulations and the needs of the industry. Qualcomm’s nascent automotive business, a part of QCT, reported $589 million in sales, up 31% on an annual basis.
QCT, the corporate’s chip sales business that features automotive, Web of Things and handsets, totaled $8.42 billion in revenue in the course of the quarter, up 7% on an annual basis.
The corporate’s profitable licensing business, QTL, reported $1.46 billion in revenue, a 4% annual decline. Amon told analysts on a call that Apple had agreed to increase its patent licensing agreement through March 2027.
Qualcomm said it spent $800 million in share repurchases and $900 million on dividends in the course of the quarter.